Non-alcoholic fatty liver disease (NAFLD) is a common cause of chronic liver disease in Veterans and its prevalence continues to increase, with the growing obesity epidemic. Hepatic steatosis is a component of NAFLD, wherein there is accumulation of triglycerides in the liver. Recently we discovered that (i) GDNF transgenic mice when fed a high fat diet resist weight gain and development of hepatic steatosis, despite similar food intake and physical activity. GDNF transgenic mice over express GDNF in glia under the GFAP promoter (GDNF-tg) (ii) GDNF (expressed in glia) and its receptor GFR-1a are expressed in human and murine hepatocytes (iii) GDNF-tg mice demonstrate enhanced energy utilization assessed by indirect calorimetry, (iv) compared to WT mice fed a high fat diet the GDNF-tg mice have lower serum glucose levels and improved glucose tolerance tests. The mechanisms for these potentially beneficial effects of GDNF have yet to be explored. We hypothesize that the mechanism of GDNF prevention of high fat diet induced hepatic steatosis is through improved hepatic energy expenditure and inhibition of hepatic lipogenesis. In this proposal we will establish the necessity and sufficiency of GDNF in regulating hepatic steatosis. Currently there are few FDA approved drugs for the treatment of hepatic steatosis. We have identified a novel role for the neurotrophic factor, GDNF, that improves fatty acid b-oxidation with a combined reduction in lipogenesis; an outcome that has not been previously achieved. We will examine the mechanism underlying these processes utilizing in vitro and in vivo approaches involving over expression or knock down of its receptor GFRa1 and dissect the signaling pathways involved. In Specific Aim 1 we will determine the role of GDNF in enhancing fatty acid beta oxidation in hepatocytes. Preliminary data suggests that GDNF can activate Peroxisome proliferator- activated receptor coactivator -1a (PGC-1a) in hepatocytes, resulting in up regulation of enzymes related to fatty acids beta-oxidation and mitochondrial biogenesis. We will establish the necessity and sufficiency of GDNF in regulating hepatic fatty acid oxidation using mice over expressing GDNF (GDNF-tg mice) in vivo and in hepatocytes in vitro. In Specific Aim 2 we will demonstrate the molecular basis of GDNF inhibition of hepatic lipogenesis, focusing on GDNF downregulation of PPAR-g and its downstream lipogenic genes, FASN and CD36. Our preliminary results indicate GDNF results in a reduced expression of PPAR-g. In Specific Aim 3 we will deliver hepatocytes-specific GDNF-encapsulated nanoparticles to the liver for targeted therapy of hepatic steatosis to HF-diet fed mice and assess the therapeutic efficacy of GDNF to prevent or treat HF-diet induced steatosis in mice. Impact on Veterans Health Care: Currently more than 25% of our Veterans are obese and a larger number are overweight. In 2008, complications arising from obesity and its related metabolic syndrome cost the US health care system $147 billion (CDC MMWR report, August 2010). Strategies to prevent and treat obesity can reduce obesity related complications (like NAFLD) and health care costs. Identification of new therapies for hepatic steatosis will directly benefit the veteran population. Taken together our data from this proposal may provide novel targets for the treatment or prevention of hepatic steatosis.